National Research (NASDAQ:NRC), which operates as NRC Health, reported third-quarter revenue growth of 11% to $38 million as a large customer implementation went live on schedule and contributed revenue for the full quarter.
CEO Trent Green said the company’s growth accelerated from 4% in the first half of 2026, while total recurring contract value, or TRCV, increased 9% year over year to $154 million. Adjusted EBITDA totaled $10.9 million, representing a 28% margin, compared with a 27% margin in the first half.
“We have returned NRC Health to growth and are beginning to see the operating leverage that growth can create,” Green said during the company’s earnings call.
Implementation Supports Revenue and Margin Improvement
The company’s large multi-solution customer agreement, first discussed earlier this year, went live in July. The Experience platform contributed a full quarter of revenue during the third quarter after NRC Health invested in delivery capacity ahead of the implementation.
Green said that revenue is now absorbing those earlier costs and aided sequential margin improvement. The enablement portion of the agreement, involving NRC Health’s rounding platform, remains scheduled for implementation in the third quarter of 2027. He said the next phase will leverage much of the infrastructure already in place, though its revenue base will be smaller than that of the first phase.
During the question-and-answer session, Green said customer feedback on the implementation has been positive. He cited increased feedback volume, use of real-time reporting and what he described as favorable responses to the company’s system for pushing reports to nurse and physician leaders.
The large customer implementation accounted for less than half of the company’s third-quarter revenue growth, according to Green. The balance came from broader growth across the portfolio.
Contract Growth, Renewals and Portfolio Demand
TRCV growth was led by NRC Health’s Experience business, with meaningful contributions from Market Insights and the Governance Institute. Green said several long-standing customers shifted from annual contracts to multiyear agreements during the quarter, increasing visibility into the company’s recurring revenue base.
Management said retention remained strong and that cross-selling across its portfolio remains a major priority as customers approach renewals.
The company also said it is seeing improved commercial performance from Market Insights and the Governance Institute after forming dedicated commercial teams for the businesses last year. Market Insights posted its strongest quarterly sales performance since before the pandemic and added several new customers, Green said. The Governance Institute is on track for its strongest sales year in more than a decade.
Green said NRC Health is piloting artificial intelligence-enabled capabilities intended to make its data more accessible and actionable, while also adding AI-driven enhancements to existing products and expanding listening tools across additional points in the healthcare journey. He characterized those efforts as early in adoption.
Asked about market conditions, Green said the healthcare sector has seen fewer Experience Management requests for proposals this year, but said the company’s opportunity pipeline remained strong and the number of deals in the pipeline had increased. He said clarity around NRC Health’s product offerings, roadmap and delivery model has resonated with customers.
Conference Timing Affected Margin Comparison
Third-quarter adjusted EBITDA margin of 28% was affected by the timing of NRC Health’s Human Understanding Beyond, or HUB, customer conference. The company moved the event from the fourth quarter last year to the third quarter this year, creating an approximately four-percentage-point impact on margin comparisons, Green said.
Adjusted EBITDA margin was down three percentage points from a year earlier, but Green said that comparison is expected to reverse in the fourth quarter because of the conference timing. He added that the company expects further sequential margin improvement in the fourth quarter as the conference impact is absorbed and current implementations continue to contribute revenue.
Management cautioned that fourth-quarter margins have historically benefited from certain seasonal revenue sources and should not necessarily be viewed as a new quarterly run rate. Green also pointed to once-a-year Experience surveys and activations of sold Market Insights and Governance Institute products as potential contributors to fourth-quarter revenue.
Cash Flow and Capital Allocation
Net income and adjusted net income were each $4.7 million in the quarter. Green said the results reflected a reversal of stock-based compensation expense tied to the departure of the company’s outgoing CFO, net of ongoing grants. The effective tax rate was approximately 36%, compared with 40%, due to a reduction in nondeductible items associated with the CFO transition.
Free cash flow was $7 million, driven by changes in receivables and deferred revenue, as well as lower capital expenditures following completion of the company’s headquarters build-out last year.
NRC Health paid a quarterly dividend of $0.16 per share and repurchased about 790,000 shares under its existing $60 million repurchase authorization. Green said the company will continue to prioritize investments in products, delivery infrastructure and employees while also returning capital through dividends and opportunistic buybacks and preserving flexibility for potential strategic acquisitions.
The company has begun searching for a new chief financial officer following Shane Harrison’s departure. Green said the finance team is operating smoothly during the transition.
About National Research (NASDAQ:NRC)
National Research Corporation, formerly traded on the Nasdaq under the symbol NRC, provides research, analytics and performance-improvement services to the health care industry. Through its NRC Health business, the company helps hospitals, health systems and other care organizations understand and improve patient, consumer and employee experiences.
Its offerings have included patient and employee surveys, market research, reputation management, loyalty and engagement programs, benchmarking, and software tools that turn feedback and other data into operational insights.
